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Thursday, March 03, 2011

"Breaking News: Tax Revenues Plummeted"

David Cay Johnston:

Breaking News: Tax Revenues Plummeted, by David Cay Johnston: We take you now to the official data for important news. ... Lowered tax rates did not result in increased tax revenues as promised by politician after pundit after professional economist. And even though this harsh truth has been obvious from the official data for some time, the same politicians and pundits keep prevaricating. ...
No matter how many times advocates of lower tax rates said it, tax rate cuts did not pay for themselves, did not spur economic growth, did not increase jobs, and did not make America better off.
Now that the news has been broken, let's see how many political leaders start speaking facts instead of fairy tales. And let's also watch to see how many Washington reporters, news anchors, talk show guests, and syndicated columnists use the actual figures. It's called holding politicians accountable, and it used to be a mainstay of journalism, where the first rule is to check it out and the second is to cross-check until you know what is going on and can give context. ...

I was going to say, "don't count on it." But then I kept reading:

So how soon will we see Washington journalists holding politicians accountable for what they say about taxes, tax rates, revenues, economic growth, and jobs?
Here's some advice: Don't hold your breath. Washington has become a city of ideological marketing, where those who would note that the emperors have no facts are unwelcome in their own newsrooms. ...[continue reading]...

The claim from conservatives that defict reduction will help the economy recover from the recession is their latest attempt to pursue ideological goals by convincing people that down is really up.


In Search of the Confidence Fairy, by Paul Krugman: In the debate over the budget, Republicans seem to be leaning on the claim that austerity will actually increase employment, because it will raise business confidence; at least that’s what John Taylor seems to be saying.
But how’s that going in Britain, where the Cameron austerity program was supposed to lead the way?
Most of the discussion of Britain I’ve seen focuses on GDP numbers, with the debate then centering on how much of the decline in the 4th quarter was weather-related. But a lot of things affect GDP. Why not look directly at confidence? The BDO has a convenient survey of business optimism (pdf); numbers for December and January here. Here’s what it looks like:


Austerity seems to have hurt, not helped, business confidence; as the BDO says, “Private sector unprepared to fill the hole left by public sector cuts.”
Why do we think the US experience — with the GOP proposals far less serious and responsible than Cameron’s — would be any better?

    Posted by on Thursday, March 3, 2011 at 09:27 AM in Budget Deficit, Economics, Press, Taxes | Permalink  Comments (46)


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